Is ASSOB the answer?

We continue to work our way up the funding ladder, looking at the various options available to businesses to raise finance to fund growth. Having taken a closer look at crowd funding, grant funding and business angels now it’s the turn of ASSOB!

ASSOB stands for the Australian Small Scale Offerings Board.  Many people haven’t considered ASSOB as an option for raising capital but it has raised over $120m for over 200 companies and so should be a serious consideration for the right sort of company.

ASSOB is an unlisted securities platform, it is not a stock exchange like the ASX or NSX which shows live buy and sell offers although they do have a secondary sales functionality but given the lack of liquidity sales are relatively infrequent.

The process

You cannot list on ASSOB without using one of their accredited sponsors. The sponsor is responsible for holding your hand through the requirements of a listing as well as facilitating the preparation of an information memorandum which is the primary sales document used to raise capital.

Before listing on the ASSOB platform you have to seek approval from the listing committee and it’s not a foregone conclusion. They do consider quality start-ups but prefer established profitable companies. If you’re a start-up with no track record of revenue or profitability ASSOB isn’t really for you.

ASSOB operates under a class order from ASIC (02/273), this basically means that it is allowed to run a business matching service and facilitate the raising of up to $5 million from 20 ‘sophisticated’ or high net worth individuals in any 12 month period but without the onerous regulations of a full listing including disclosure statements.

In a way ASSOB is a form of crowd funding, where companies listed on the platform use their networks to find people to invest in their company. The main difference though is that you are limited to 20 investors in any 12 month period and they must be ‘sophisticated’ or ‘high net worth’ individuals, which, as you can imagine, significantly restricts your target market vs more traditional crowd funding.

When you list on ASSOB you have to become a public company and comply with the relevant Corporations Act legislation, most notably at least 3 directors and an annual audit to name a few. As a result of this ‘public’ company requirement ASSOB is a great staging ground before a listing on a recognised stock exchange such as ASX or NSX. So if you’re planning a move to a recognised stock exchange ASSOB is a good stepping stone.

Many companies list on ASSOB as a ‘compliance listing’, not to raise capital but to establish a channel for shareholders to buy and sell shares via the secondary sales platform. The secondary sales platform is not an established market, in other words it DOES NOT quote live share prices, all it does is quote asking prices and then leaves it up to a willing buyer and willing seller to negotiate.

Dispelling the ASSOB myth

ASSOB has a database of over 15,000 registered investors on its platform and many companies make the mistake of assuming that they will easily attract investment just by marketing to this database. This is NOT the case.

Many of these ‘investors’ are not active and you cannot rely on this database for your capital needs. You have to go out and market your company, much like crowd funding, but you cannot approach the public. Therefore you have to have a solid marketing and public relations campaign to act on.

This is a much more difficult process than crowd funding. With crowd funding you can approach anybody to promote your project. With ASSOB you are only allowed to approach sophisticated or high net worth individuals, i.e. you can’t just post something on your website stating you’re looking for capital, go and look at our ASSOB profile!

The other common mistake is to rely on the sponsor to bring the investors. Don’t get me wrong, some sponsors are very well connected and will give you access to more potential investors, BUT the sponsor’s primary role is to guide you through the ASSOB process and ensure you comply with the legislation.

This is the piece that many companies listing on ASSOB struggle with so make sure that if you are considering ASSOB as a means to raise capital you go into it with your eyes wide open.


Let’s conclude by summarising in terms of the key aspects of our funding ‘checklist’: 

  • Cost of funding – An ASSOB listing can cost anywhere from $8,000 upwards, $4,500 of this is ASSOB application and admission fees and the balance relates to sponsor fees although these can vary widely depending on the size and complexity of the company and what they are trying to achieve. Then there is the success fee, ASSOB take 1.5% (plus GST) of all funds raised and your sponsor will typically take anywhere between 5% and 7% of funds raised.
  • Ease of access – You will need to be approved by the listing committee prior to being included on the platform. ASSOB prefers more established companies with a track record but will look at start-ups as long as there is some kind of track record of revenue and profitability.
  • Speed – The process is typically not that quick. There are still a bunch of legal requirements that have to be complied with and this takes time. You’ll need to exercise some patience and expect at least a 6 month process.
  • Security – none, you’re looking for equity investors and so there should be no security requirements.
  • Consequences – The main consequence of an ASSOB listing is the corporate governance that you now have to comply with as a result of being a public company.
  • Size – The funding range is from $200,000 to $5 million although the average is around the $600,000 mark. 

Please feel free to contact Lattice Capital on for advice regarding capital raising options in Australia.

Next week we’ll work our way a little further up the funding ladder and take a closer look at Venture Capital & Private Equity.

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About latticecapital
We are an independent Corporate Advisory business based in Brisbane, Australia. We established our company in 2008 in response to a gap in the Brisbane advisory market for independent corporate advice. Our principals collectively have in excess of 40 years of Corporate Advisory experience.

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